Power equipment stocks gain on import duty hike

CCEA approves 21 per cent duty on imports of power equipment

Shares of power equipment makers such as Bharat Heavy Electricals Ltd (BHEL), Larsen and Toubro, Crompton Greaves, BGR Energy, Alstom India and Thermax are trading higher in opening trades after the cabinet cleared new duty structure for import of power equipment.

The Bombay Stock Exchange (BSE), capital goods index, the largest gainer among sector indices is up 42 points as compared to 11 points fall in the benchmark Sensex in opening trades.

“The government will shortly impose a 5% import duty on power generation equipment in a move that will help improve the competitiveness of domestic manufacturers,” the report suggests.

 

In addition, the government will also impose a 12% countervailing duty (CVD), a sort of equalization levy, to make up for the excise duty on local products, and 4% special additional duty (SAD), taking the effective tax rate to 21%, added report.

Among the individual stocks, Thermax is up 2%, followed by Havells India, BHEL and Alstom India, which are trading higher by 1-2% on the BSE.